Canadian Securities Regulators Seek Comments on Mutual Fund Risk Classification Methodology

MONTREAL, Dec. 12, 2013 /CNW Telbec/ - The Canadian Securities Administrators (CSA) published today for comment CSA Notice 81-324 and Request for Comments Proposed CSA Mutual Fund Risk Classification Methodology for Use in Fund Facts (CSA Notice 81-324), which sets out a proposed risk classification methodology (the Proposed Methodology) for use by mutual fund managers in the fund facts document (Fund Facts).

The Proposed Methodology has been developed in response to stakeholder feedback that the CSA has received throughout the implementation of the point of sale disclosure framework for mutual funds, notably that the lack of use by fund managers of a standardized risk classification methodology could result in inconsistent measurements of risk and make comparisons between mutual funds difficult.

Currently the Fund Facts requires the manager of a mutual fund to provide a risk rating on a scale of five categories ranging from Low to High. A mutual fund's risk classification methodology is chosen and applied at the fund manager's discretion in order to determine that rating.

"The Fund Facts is designed to ensure that key information about a mutual fund is provided to investors in a simple and comparable format," said Bill Rice, Chair of the CSA and Chair and CEO of the Alberta Securities Commission.  "The consideration of a standard risk classification methodology is intended to enhance that objective, and promote consistency in how risk is measured by mutual fund managers."

The CSA welcomes feedback on the Proposed Methodology. In particular, the CSA is interested in whether the Proposed Methodology should be mandated or whether it should be adopted as a guidance for investment fund managers. CSA Notice 81-324 can be found on CSA members' websites. The comment period is open until March 12, 2014.

The CSA, the council of the securities regulators of Canada's provinces and territories, coordinates and harmonizes regulation for the Canadian capital markets.

For more information:
Sylvain Théberge	Mark Dickey
Autorité des marchés financiers	Alberta Securities Commission
514-940-2176	403-297-4481
Richard Gilhooley	Carolyn Shaw-Rimmington
British Columbia Securities Commission	Ontario Securities Commission
604-899-6713	416-593-2361
Kevan Hannah	Wendy Connors-Beckett
Manitoba Securities Commission	Financial and Consumer Services Commission
204-945-1513	New Brunswick
	506-643-7745
Tanya Wiltshire	Janice Callbeck
Nova Scotia Securities Commission	PEI Securities Office
902-424-8586	Office of the Attorney General
	902-368-6288
Doug Connolly	Rhonda Horte
Financial Services Regulation Div.	Office of the Yukon Superintendent of
Newfoundland and Labrador	securities
709-729-2594	867-667-5466
Louis Arki	Donn MacDougall
Nunavut Securities Office	Northwest Territories
867-975-6587	Securities Office
	867-920-8984
Daniela Machuca
Financial and Consumer Affairs
Authority of Saskatchewan
306-798-4160

SOURCE: Autorité des marchés financiers

Sylvain Théberge
Autorité des marchés financiers
514-940-2176

Richard Gilhooley
British Columbia Securities Commission
604-899-6713

Kevan Hannah
Manitoba Securities Commission
204-945-1513

Tanya Wiltshire
Nova Scotia Securities Commission
902-424-8586

Doug Connolly  
Financial Services Regulation Div.
Newfoundland and Labrador
709-729-2594

Louis Arki
Nunavut Securities Office
867-975-6587

Daniela Machuca 
Financial and Consumer Affairs
Authority of Saskatchewan 
306-798-4160

Mark Dickey
Alberta Securities Commission
403-297-4481

Carolyn Shaw-Rimmington
Ontario Securities Commission
416-593-2361

Wendy Connors-Beckett
Financial and Consumer Services Commission
New Brunswick
506-643-7745

Janice Callbeck
PEI Securities Office
Office of the Attorney General
902-368-6288 

Rhonda Horte 
Office of the Yukon Superintendent of securities 
867-667-5466

Donn MacDougall
Northwest Territories
Securities Office
867-920-8984